NEW DIRECTIONAL CALL PLAYS

SOHU.com Inc. - SOHU - close: 68.73 change: +2.89 stop: 63.25

Why We Like It:
SOHU is a Chinese Internet company and shares are breaking out from a multi-week consolidation. The stock displayed relative strength with a 4.3% gain on stronger than normal volume today. The breakout over resistance at $66.00 suggest a new leg has begun. The stock has above average short interest. If this is a short squeeze it could really move fast. The breakout has also produced a new bullish P&F chart with an $88 target.

I'd rather not chase this move. If we can catch a dip near $67.00 the options should be a lot cheaper. I'm suggesting readers use a trigger at $67.00 to open positions. There is some resistance at $70.00 but our first target is $72.50. Our second target is $77.00.

Suggested Options:
I am suggesting the October calls. I prefer the $70 strike.

BUY CALL OCT 65.00 TKZ-JM open interest=261  current ask $5.90
BUY CALL OCT 70.00 TKZ-JN*open interest=444  current ask $3.10
BUY CALL OCT 75.00 TKZ-JO open interest= 93  current ask $1.30

Annotated Chart:

Picked on September xx at $ xx.xx <-- TRIGGER @ 67.00
Change since picked:       + 0.00
Earnings Date            10/26/09 (unconfirmed)
Average Daily Volume =        577 thousand 
Listed on September 15, 2009